treatment of SEZ sales

[Former Member]

hi,

sap gurus,

my client wants to configure a process for a SEZ customer,

but the complexity lies here that SEZ customer is not to be charged any duties or levies, no excise conditions are calculated.

Therefore, no excise entries will flow in excise document and as well as ARE1 document.

how to config this process. bcz i am new to this process

Any information that you provide will be very helpful.

regards,

balaji.t

09990019711

[Former Member]

Hi Balaji

Sale to a Customer located in a SEZ is another form of a Deemed Export except that in the case of a Deemed Export you generate an ARE3 Form through J1IA301 while in the case of a SEZ Sale you need to generate an ARE1 Form through J1IA101.

The process is the same: Create Sales order --> Delivery --> Excise Invoice. When you hit the 'Calculator' icon in J1IIN and verify the Excise Invoice Type, you will notice that 'Deemed' gets highlighted in Blue. You then do J1IA101 with reference to the Excise invoice except that you need do not take reference to a Bond or a LUT and you can still generate the ARE1, although you get an information at the bottom of the screen that no reference has been made in the ARE1. Save and post the ARE1 as usual.

Atleast this is what happened in my case and it is working. Probably other Consultants may give you alternate ways on this one ...

Regards

Ramana ND

[Former Member]

Balaji,

You have to be specific. If you are talking about supply to an SEZ, then the process is using an ARE-3 Procedure where the SEZ company will be providing the CT3 form endorsed by the Central excise and based which the local manufacturer will clear under ARE-3 Procedure.

This is called deemed exports, In this procedure Advance licence is extended by the SEZ COMPANY and the supplier can avail this for imports. CT1 and CT2 procedures are also called deemed exports in Excise parlance but they don;t extend the Advance licence for imports to the supplier. So in reality customers will only talk of CT3 as Deemed exports. (Just for your info)

There are two sets of Procedures you will need to do here.

One is the Central excise procedure for ARE-3 which you will find in CIN documentation or in any of the relevant BPs.

Second you will have to go to Foreign trade and maintain the licences for CT3.

Its quite a task so I advise you to look into the docs before you proceed.This is a very old procedure mentioned in the Central excise rules of 1944 and hence if you look up the latest 2004 central excise rules you will not find any mention of it. But even though its very old rule, it still is used today,

regds

Jude Xavier

[Former Member]

Dear Balaji,

SEZ supply is as good as Physical export , only difference is customer is within india.

1. Customer has to provide 'Bill of Export' .

2. You need to define one form in below node

SPRO -- Logistics - General - Tax on Goods Movements -- India -- Master Data - Define Form Types , here the right most TaxCl4Cust will be maintained with one single charector ( any thing you want ).

3. You maintain all duty component aginst form type as '0' % through VK11 .

4. While making sales order - header -billing - Alt tax cl - 4 will be set with this single charector flag.

By doing this your duty will not be calculated as you are communicating to the system that this is 'Duty forgone ' scenerio.

Then normal delivery - billing - J1IIN .

During ARE , you need to debit the bond as this is a duty forgone case.

Just try and post your quries as and when u get the problem .

If it is useful information, please rate.

saravanan

[Former Member]

Hi to all !

We also have the same scenario. But here we need to treate it the customer is Importing it from outside india as per the SEZ law as given below,

'' e. Any sales from SEZ to DTA (DOMESTIC TARIFF AREA) will be treated as import and import duty will be applicable as per GOI policy. Sales tax will be applicable to SEZ goods as applicable to other imported goods. Same Rules and Procedure will be applicable to SEZ goods as applicable to normal imports."

So, we need to charge the custome for the following same like as in purchase,

10 Assessable value: xxxx

20 Basic customs duty 10% xxx

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30 (10+20) Sub total xxxx

40 CVD 14% xxx

50 Ecess on CVD 2% xxx

60 S&H cess on CVD 1% xxx

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70 (204050+60) Total customs duty xxxx

80 Ecess on Customs duty 2% xxx

90 S&H cess on Customs duty 1% xxx

-

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100 Total ( 107080+90) xxxx

AED / Sales tax 4% xxx

-

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Total xxxxxx

-

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Note: In some scenario they charge sales tax instead of AED.

Anybody can help me to configure this requirement. We are using Taxinj procedure.

[Former Member]

Hi Balaji,

frankly i have no idea on the process but found this document to be good. you may also check it once.

[SEZ|http://web.du.ac.in/~geography/SAP_files/paper10.pdf]

regards

sadhu kishore